NAB Study Guide Questions With Correct
Answers A+
Education and training programs. - AnswerTo obtain more accurate cost estimates and more
control over costs (participatory budget making process - others are more likely to consider the
budget legitimate).
A change in which one of the following...
Education and training programs. - Answer✔To obtain more accurate cost estimates and more
control over costs (participatory budget making process - others are more likely to consider the
budget legitimate).
A change in which one of the following is not likely to be the cause of a budget variance? -
Answer✔The personal needs allowance.
"Assets are always equal to the sum of liabilities plus owners' equity" is the basic concept in the
organization of the: - Answer✔Balance Sheet.
The financial success or failure of a nursing facility is usually measured by its: - Answer✔Return
on Equity (net income - i.e., revenues in excess of expenses) and divides it by owners' equity).
If a facility has a current ratio greater than 1, which of the following statements is most likely to
be true? - Answer✔It will be able to pay its bills on time (current ratio greater than 1 means that
the organization's current assets exceed its current liabilities, and this indicates a good ability to
pay short-term liabilities as they come in).
A check should generally be issued only when which one of the following is available and
properly signed? - Answer✔Purchase Order.
The importance of matching revenue with the expenses incurred in generating those revenues is
the reason for recording which one of the following? - Answer✔Depreciation (the purpose of
recognizing depreciation is to satisfy the Matching Principle (GAAP) stated in this question).
Using the straight-line method, what would be the annual depreciation expense for a piece of
equipment having a cost of $6,000.00, a manufacturer's warranty for 2 years, and an estimated
useful life of 6 years? - Answer✔$1,000.
Which of the following is a current asset? - Answer✔Accounts Receivables.
Under the accrual basis of accounting, revenues are recorded when _______ and expenses are
recorded when ______________. - Answer✔Revenues are earned - expenses are incurred.
A generally accepted accounting principle (GAAP) would be violated if a company: -
Answer✔Used in its balance sheet an optimistic estimate of the current market value of its
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building (the use of current market value rather than historical costs would not be consistent with
the Objectivity GAAP, and the use of an optimistic rather than conservative estimate would
violate the Conservatism GAAP).
Last year's food costs for a 100-bed facility were $146,820. The facility had an average
occupancy rate of 85% that year. What was this facility's food cost per patient day (PPD)? -
Answer✔$4.73
The Medicare benefit period ends when a beneficiary - Answer✔Has had 60 straight days with
neither any hospital days nor SNF days
Medicare Part A coverage of skilled nursing facility (SNF) care entails out-of-pocket payment by
the patient of a daily amount for which days of SNF care in a benefit period? - Answer✔21st
through 100th
Which of the following statements is NOT true regarding the Medicare Prospective Payment
System for Skilled Nursing Facilities? - Answer✔There are separate prospective rates for
capital-related costs (Medicare does not make separate reimbursement to SNFs for capital-
related costs. The RUG rate that the facility receives is expected to cover all types of costs).
A RUG is a: - Answer✔Category in a resident classification system.
Completion of the Medicare cost report requires carrying out all except which one of the
following tasks? - Answer✔Aging of accounts receivable.
The term for unintentional improper or excessive use of benefits of a health insurance program
is: - Answer✔Abuse.
The process by which an individual becomes eligible for Medicaid by incurring medical
expenses until personal resources fall below a specified ceiling is called: - Answer✔Spend Down
Which of the following statements regarding budgeting procedure is correct? - Answer✔A cash
budget may provide advance warning of months when cash outlays fall short of cash receipts.
An example of a variable cost is: - Answer✔Nursing supplies.
If the facility's occupancy increases from 94% to 98%, the fixed cost per resident -
Answer✔Decreases slightly (Fixed cost per resident is calculated by dividing total fixed costs by
number of residents (currently-occupied beds). If the occupancy rate increases slightly, fixed
costs do not change (by definition), and number of residents increase, resulting in a decreased
fixed cost per resident. Another way of saying this is that the fixed costs are spread over a larger
number of residents.
A nursing home is considering the purchase of a new dish-washing machine that costs $6,000
and has a useful life of 10 years (with no salvage value). It is estimated that the machine will
reduce annual operating costs by $800 over each of the next ten years. What is the payback
period? - Answer✔7.50 years.
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